China and India Cut Tariffs on Imported Cosmetics amid Trade War with US

Since July 1st, China has lowered import tariffs on 19 cosmetic products and India has lowered import tariffs on 26 cosmetic items. The tariffs concessions were made as part of the Asia-Pacific Trade Agreement (APTA)...

Takehome:

Since July 1^st, China has lowered import tariffs on 19 cosmetic products and India has lowered import tariffs on 26 cosmetic items.
The tariffs concessions were made as part of the Asia-Pacific Trade Agreement (APTA).

In June, Tariff Policy Department of China Ministry of Finance announced that starting from July 1^st, 2018, China will slash duties on 8549 imported goods originating from South Korea, India, Bangladesh, Sri Lanka and Laos in accordance with the conventional tariff rates specified in the “Second Amendment to the APTA”. 19 types of cosmetics products are included:

No.	Tariff No.	Description of Goods	Most-Favored-Nation Rate (%) (MFN Tariff)	Conventional Tariff Rate after 2018.07.01 (%)
1	33030000	Perfume and Floral Water	10	6.5
2	33041000	Lip Make-ups	10
3	33042000	Eye Make-ups	10
4	33043000	Nail Make-ups	15
5	33049100	Face Powder	10
6	33049900	Other Beauty Products (Cosmetics, Skin Care Products)	6.5
7	33051000	Shampoo	6.5	4.2
8	33052000	Permanent Wave Agent	15
9	33053000	Hair Styling Composition	15
10	33059000	Other Hair Care Products	10	6.5
11	33061010	Toothpaste	10	6.5
12	33061090	Other Teeth Cleaning Product	10	6.5
13	33062000	Dental Floss	10	6.5
14	33069010	Mouthwash	10
15	33069090	Other Oral Cleaning Agent	10
16	33071000	Shaving Agent	10	6.5
17	33072000	Deodorant and Antiperspirant	10	6.5
18	33073000	Bath Salt and Other Bath Agent	10	6.5
19	33079000	Depilating Agent and Other Aromatic Products	9	5.9

» Note: Stakeholders wanting to know the whole list can refer to our Database.

Right after China’s announcement, India announced tariff reductions on 3142 imported commodities including 26 cosmetic products. The tariff concessions policy has also been effective from July 1. The 26 items are as follows:

No.	Tariff No.	Description of Goods	Standard Rate of Duty (%)	Extent of Tariff Concession (Percentage of Applied Rate of Duty; %)
1	33041000	Lip Make-up Preparations	10	10
2	33042000	Eye Make-up Preparations	10	15
3	33043000	Manicure or Pedicure Preparations	10	15
4	330491	Powders, whether or not compressed	10	15
5	33049110	Face Powders	10	15
6	33049190	Other Powders	10	15
7	33049910	Face Creams	10	15
8	33049920	Nail Polish or Lacquers	10	15
9	33049930	Moisturising Lotion	10	15
10	33049940	Sindur, Bindi, Kumkum	10	15
11	33049950	Turmeric Preparations	10	15
12	33049990	Other Beauty Products (Cosmetics, Skin Care Products)	10	15
13	33051010	Shampoos Containing Spirit	10	15
14	33051090	Other Shampoos	10	15
15	33052000	Preparations for Permanent Waving or Straightening	10	15
16	33053000	Hair Lacquers	10	15
17	33061010	Dentifrices in Powder	10	10
18	33061020	Dentifrices in Paste	10	10
19	33061090	Other Dentifrices	10	10
20	33062000	Yarn used to clean between the teeth (dental floss)	10	30
21	33069000	Other Oral Cleaning Agent	10	30
22	33071010	Shaving Cream	10	15
23	33071090	Other Pre-shave, Shaving or After-shave Preparations	10	15
24	33079010	Depilatories	10	15
25	33079020	Sterile Contact Lens Care Solution	10	15
26	33079090	Other Perfumery, Cosmetic or Toilet Preparations	10	15

» Note: Stakeholders wanting to know the whole list can refer to our Database.

The two announcements have profound implications for global trade. The timing of the announcements is also interesting as they coincide with escalating Sino-US trade conflagrations however this tariff reduction deal is actually part of a preexisting APTA agreement which predates the current China-US trade situation rather than the outcome of tit-for-tat retaliations between China and USA.

What is APTA?

APTA, formerly known as Bangkok Agreement, is an initiative signed in 1975 by developing countries in Asia-Pacific region comprising China, South Korea, India, Sri Lanka, Bangladesh and Laos. Serving as the earliest preferential trade agreement, the pact commits to promote economic and trade cooperation and expansion among member states through the exchange of tariff concessions and other non-tariff preferential treatments.

The recent reduction of India and China’s tariffs is the result of the fourth round of negotiations under APTA which was held on January 13th last year, bringing the total number of products subject to preferential tariffs between APTA member states to over 10,000.